How to Start a Construction Company in Ohio | Essential Guide

by
Ohio Construction Company

Starting a construction company in Ohio can be lucrative and rewarding for anyone with the right skills, resources, and determination. With a strong demand for quality construction services and a consistently growing population of 11,878,330 (2024 data), there is always room for new Limited Liability Companies to thrive in this industry. However, starting a construction company is a challenging task and requires careful planning, dedication, and hard work.

In this article, Webinarcare Editorial Team will discuss the necessary steps to Start a Construction Company in Ohio and provide valuable tips for ensuring your success in this competitive industry.

How to Start a Construction Company in Ohio

What is a Construction Company?

A construction company in Ohio is a business that specializes in the planning, design, and execution of construction projects. These projects can range from residential homes to commercial buildings and infrastructure projects such as roads, bridges, and utility systems. Ohio construction companies must adhere to local building codes, regulations, and licensing requirements to ensure their projects are safe, efficient, and compliant with state standards.

Ohio construction companies often offer various services, including general contracting, design-build, and specialized construction services. They collaborate with various stakeholders, such as architects, engineers, developers, and property owners, to bring projects to life. By employing skilled tradespeople, project managers, and other professionals, construction companies in Ohio work to deliver high-quality, durable structures that meet their client’s needs and contribute to their community’s development and growth.

If you plan to start an LLC for your construction company, hire the Best LLC Services in Ohio. They offer the top features and prices for you to check out.

LLC Service

Rating & Pricing

Top Features

Learn More

#1 Recommendation

$0 + State fee

  • Free LLC Formation

  • Legal Support

  • Highly Reputed Company

Learn More

$299 + State fee

  • Single LLC formation package

  • Flat price for all services

  • Legal consultation

Learn More

It is suggested that you speak with a legal professional before you begin setting up a construction company. They’ll understand what’s best for you and your future company. To safeguard your personal assets from business debts, you can always start an LLC in Ohio.

– WEBINARCARE EDITORIAL TEAM

How to Start a Construction Company in Ohio

To launch a construction business, you must follow the guidelines that include researching the construction industry, developing a business plan, registering your business, securing funding, purchasing equipment and material, hiring a skilled team, and marketing your construction company.

Step 1: Research the Construction Industry

Before diving into starting your construction company, it’s essential to understand the local construction industry in Ohio. Research your area’s market trends, major players, and potential competition. This will help you identify gaps in the market that your company can fill and allow you to make informed decisions about the types of services you want to offer.

Some key areas to research include:

  • Types of construction projects in demand (residential, commercial, etc.)
  • The average cost of construction projects in your area
  • Local building codes and regulations
  • Key stakeholders in the industry (architects, developers, etc.)
  • Licensing and certification requirements for contractors in Ohio

Step 2: Develop a Business Plan

A well-thought-out business plan is crucial for the success of any new business, including a construction company. Your business plan will act as a roadmap for your company’s growth and development, helping you make informed decisions and keep your business on track.

Some key elements to include in your construction company business plan are:

  • Company Overview: Describe your company’s mission, vision, and goals. Include the legal structure of your business (LLC, corporation, sole proprietorship, etc.) and your company’s name and location.
  • Market Analysis: Summarize your research on the local construction industry, including the target market, competition, and growth opportunities.
  • Services Offered: Clearly define the types of construction services your company will offer, such as general contracting, design-build, or specialized construction services.
  • Marketing and Sales Strategy: Outline how to attract and retain clients and your strategies for generating leads and closing sales.
  • Management and Organization: Detail the roles and responsibilities of your management team and any key personnel you plan to hire.
  • Financial Projections: Provide a realistic estimate of your company’s financial performance over the next few years, including projected income, expenses, and profits.

Step 3: Choose a Business Name

Selecting a name for your Ohio construction company is essential to forming. Your business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Ohio Business Name Search for you to have a proper Ohio construction business name. 

In Ohio, if you do not wish to file your construction business company right away but want to hold the name that you have decided on, then you can reserve your Ohio construction business name for some time. You must file a name reservation application with the Ohio Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Ohio DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in two methods, by mail and in person.

However, before filing a DBA, you should know that you need to renew your DBA every five years, which costs varies by county.

You can check the availability of your desired business name by searching the Ohio Secretary of State Business Search‘s website.

Recommended: Embark on your entrepreneurial journey confidently and affordably with LegalZoom’s DBA service, the beacon that guides businesses to credible branding and comprehensive compliance. Discover how effortless success can truly be!

– LegalZoom – ($99 + Filling Fees)

Step 4: Register Your Construction Company

Register your business with the appropriate government agencies before officially starting your construction company in Ohio and obtain any necessary licenses and permits. 

Hire a Statutory Agent

A Statutory Agent is a person or entity responsible for receiving legal documents and official notices for your construction business. The qualifications of a Statutory Agent vary depending on the jurisdiction, but generally, they must meet the following criteria:

  • Age: The Statutory Agent must be at least 18 years old.
  • Residency: The Statutory Agent must reside where the company is registered or authorized to do business in that state. In some jurisdictions, a domestic corporation or limited liability company (LLC) can act as its Statutory Agent if it has a physical address in Ohio.
  • Physical Address: The Statutory Agent must have a physical street address, not just a post office box, where the company is registered. This is where they will receive official correspondence and legal documents on behalf of the company.
  • Availability: The Statutory Agent must be available during normal business hours (9 a.m. to 5 p.m., Monday through Friday) to receive and sign official correspondence and legal documents.
  • Good Standing: If the Statutory Agent is a business entity, it must be in good standing with the state and not be in default, suspended, or revoked.
  • Compliance: The Statutory Agent should know Ohio requirements and deadlines for the company, such as Biennial Reports and Ohio franchise tax filings, and ensure that the company stays compliant. 

You can serve as your Statutory Agent, appoint a friend or family member, or hire a Professional Ohio Statutory Agent Services.

Recommended: Professional services will ensure your business gets legal notices and critical mail. With LegalZoom’s Registered Agent Services, they offer peace of mind and expert support for businesses, ensuring compliance and seamless communication with state authorities. That’s why we recommend using –

LegalZoom – $249/year

File For Articles of Organization or Articles of Incorporation

If you form an LLC for your construction company, you must file the Ohio Articles of Organization, which costs $99. However, you must file the Articles of Incorporation if you form Ohio Corporation for your construction company. The Articles of Incorporation filing fee costs $99 for online and by mail filing. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online 
  • Offline Filing: Send the form by mail or drop it off at Ohio Secretary of State, P.O. Box 670, Columbus, OH 43216

Recommended: Filing the Articles of Organization and the Articles of Incorporation is easy and hassle-free if you hire a professional service. We recommend using –

LegalZoom – ($0 + State Fee)

Create an Operating Agreement

Operating Agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in Ohio is optional. Yet, having one as an internal document is strongly advised. 

Recommended: Creating an Operating Agreement is like having a personal legal guide at hand; it’s efficient, thorough, and ensures the smooth and compliant operation of your business. With LegalZoom’s operating agreement, it will protect your rights as an owner, keeping misunderstandings at bay and your business on the path to success. That’s why we recommend using –

LegalZoom – Starts at $99

Obtain an Employer Identification Number

You must first obtain Ohio Employer identification number (EIN) from the IRS if you will open a bank account or hire an employee for your Ohio construction company. 

The application of an EIN in Ohio can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Step 5: Obtain the Necessary Licenses and Permits

Starting a construction company in Ohio requires several licenses and permits. Some of the most common licenses and permits you’ll need include the following:

  • Business License: Your local city or county government may require Ohio Business License. The business license fee in Ohio ranges from $50 – $300.
  • Contractor’s License: A contractor’s license is required in most states for construction businesses that perform specific types of work, such as general contracting, electrical, plumbing, HVAC, or other specialized trades. Requirements for obtaining a contractor’s license may include passing an exam, providing proof of experience, and obtaining bonding and insurance.
  • Building Permits: Construction projects typically require permits issued by the Ohio building department. Building permits ensure the construction project complies with local building codes and regulations.
  • Occupational Licenses: Some states may require occupational licenses for specific types of work, such as asbestos abatement, lead paint removal, or the installation of fire protection systems. Check with your state’s licensing board to determine if any special licenses are required for the work your construction company will perform.
  • Ohio Sales Tax Permit: A sales tax permit from the Ohio Department of Taxation allows you to collect sales tax. Currently, the Ohio sales tax rate is 5.75%.
  • Environmental Permits: Depending on the nature of your construction projects, you may need to obtain environmental permits, such as stormwater discharge or air quality permits.

Step 6: Secure Funding

Starting a construction company requires significant capital to cover equipment, materials, and labor costs. To secure funding for your Ohio business, you must explore various financing options and determine the best fit for your needs.

When seeking funding, be prepared to present your business plan and financial projections to potential lenders or investors. This will demonstrate your commitment to your company’s success and help build their confidence in your ability to repay the loan or generate a return on their investment.

However, consider applying for your construction company’s Ohio Small Business Loans.

Step 7: Purchase Equipment and Materials

Once you have secured funding for your Ohio construction company, you must purchase the necessary equipment and materials to begin operations. This may include items such as:

  • Construction vehicles (trucks, excavators, etc.)
  • Power tools and hand tools
  • Safety equipment (hard hats, safety goggles, etc.)
  • Building materials (lumber, concrete, etc.)
  • Office equipment and supplies (computers, printers, etc.)

Invest in high-quality equipment and materials, as this will help you deliver exceptional results to your clients and build a strong reputation in the industry. Consider purchasing insurance for your equipment, as this can help protect your investment in the case of theft, damage, or accidents.

Step 8: Hire a Skilled Team

Your Ohio construction company’s success will largely depend on your team’s skills and expertise. Hire individuals with experience and knowledge in the construction industry to build a strong workforce. This may include:

  • Project managers
  • Construction laborers
  • Skilled tradespeople (electricians, plumbers, etc.)
  • Architects or engineers
  • Administrative staff (accountants, receptionists, etc.)

In addition to hiring qualified employees, invest in ongoing training and development programs to help your team stay current on industry trends, technologies, and best practices. This will improve the quality of your services and help you attract and retain top talent in the competitive construction industry.

Step 9: Market Your Construction Company

You must develop a comprehensive marketing strategy to attract clients and grow your Ohio construction company. This may include building a professional website that showcases your services, portfolio, and testimonials from satisfied clients; creating and distributing print materials, such as brochures, business cards, and direct mail advertisements; networking with industry professionals, such as architects, developers, and real estate agents, to generate leads and referrals, and utilizing social media and digital marketing strategies to reach a wider audience and drive traffic to your website.

By consistently promoting your Ohio construction company and showcasing your expertise and quality work, you can build a strong reputation in the Ohio construction industry and attract a steady stream of new clients.

Benefits of Forming a Construction Company

Forming a Construction LLC is best for a start-up company since it offers the following advantages.

Limited Liability Protection

LLC provides limited liability protection to its owners, also known as members. This means that the personal assets of the LLC members are separate from the company’s debts and liabilities. In the construction industry, where accidents, property damage, and contractual disputes occur, limited liability protection is crucial to protect business owners’ assets.

Pass-through Taxation

An LLC typically offers pass-through taxation, meaning the company’s profits and losses are reported on the owner’s tax returns. This avoids the double taxation corporations may face, where the company and its shareholders are taxed separately. Pass-through taxation can lead to potential tax savings for the Ohio construction company’s owners.

Flexibility in Management

LLCs have a more flexible management structure than corporations. They do not require a board of directors, and the owners can choose how to manage the company through member or manager management. This flexibility allows Ohio construction companies to adapt their management structure as needed.

Simpler Record-Keeping and Compliance

LLCs still require formalities; they typically have fewer record-keeping and reporting requirements than corporations. This can save time and resources for Ohio construction companies, allowing them to focus on their core business operations.

Credibility

Forming an LLC can provide the Ohio construction company with increased credibility and professionalism in the eyes of clients, vendors, and financial institutions. This can be beneficial in securing contracts and building a positive reputation in the industry.

FAQs

What are the requirements for starting a construction company in Ohio?
In Ohio, you need to register your business with the Ohio Secretary of State, obtain a contractor’s license, and secure liability insurance to start a construction company.
Do I need a contractor’s license to start a construction company in Ohio?
Yes. In Ohio, anyone who bids or offers to perform construction work over $500 must have a contractor’s license.
How do I obtain a contractor’s license in Ohio?
You need to pass a trade exam and a business and law exam in Ohio to obtain a contractor’s license.
What is the minimum capital required to start a construction company in Ohio?
There is no specific minimum capital required to start a construction company in Ohio, but you will need to have enough funds to cover the costs of filing and licensing fees, insurance, and other necessary expenses.
What tax regulations should I be aware of when starting a construction company in Ohio?
Ohio businesses are required to pay the Ohio Commercial Activity Tax, and sales tax is also imposed on construction work.
How can I find new clients for my Ohio-based construction company?
Networking, online marketing, referrals, and participating in bidding opportunities through sites like the Ohio Business Gateway are all strategies for finding new clients in Ohio.
What are some start-up costs for a construction company in Ohio?
Start-up costs in Ohio can include insurance, permits, materials, labor, licensing and legal fees, marketing and advertising expenses, as well as other miscellaneous expenses.
How can I ensure that my new Ohio-based construction business complies with state regulations?
Make sure to regularly check the Ohio Construction Industry Licensing Board website and familiarize yourself with industry standards and best practices to stay current with any regulatory changes that may affect your business.
What types of construction projects are popular in Ohio?
Popular types of construction projects in Ohio include residential, commercial, industrial, and infrastructure projects such as roads and bridges.
How can I set competitive prices for my Ohio-based construction services?
You can research prices in your market, consider your costs and overhead, and factor in your profit margins to set competitive pricing for your Ohio-based construction business.
Are there any Ohio-specific laws or regulations I need to be aware of when starting my construction company?
Yes. In Ohio, certain construction categories such as plumbing and electrical work have licensing requirements that are specific to the state.
Can I start a construction company in Ohio with no experience?
Starting a construction company in Ohio with no experience may be difficult, as most jurisdictions require a contractor’s license, which involves displaying proof of experience in that field.
How can I stand out from other Ohio-based construction businesses?
You can differentiate your Ohio-based construction business by offering unique services, exceptional customer service, competitive pricing, and high-quality work.
Should I hire employees or sub-contractors for my Ohio-based construction company?
Hiring employees for your Ohio-based construction company is a more stable option, but hiring subcontractors can be more cost-effective for short-term projects.
What are the risks associated with starting a construction company in Ohio?
Risks can include competition, economic volatility, workplace accidents, liabilities, and slow periods of business.
How can I ensure the quality and safety of my Ohio-based construction projects?
You can assert quality and safety through regularly educating your employees on the latest safety and operational procedures, optimizing equipment, and vetting all vendors you work with.
How can I finance my Ohio-based construction company?
Financing options for an Ohio-based construction company may include bank loans, angel investors, borrowing from government programs or grants, and getting personal funds.
What resources are available for Ohio-based startups in the construction industry?
State agencies like the Ohio Development Services Agency and the Ohio Business Gateway can provide assistance in starting a construction business in Ohio.
What types of insurance should I get for my Ohio-based construction company?
Insurance coverage like general liability, liability for a subcontractor, and worker compensation may be beneficial for an Ohio-based construction company.
How can I find the right suppliers for my Ohio-based construction business?
You can find the right suppliers for an Ohio-based construction business by researching and vetting businesses that are focused on delivering high-quality materials.
Can I operate from my Ohio home when starting a construction company?
Operating a construction business from your Ohio home will require proof of proper licensing, insurances, and local zoning approvals accordingly, and will be dependent upon certain municipal regulations.
Do I need a construction management degree to start a construction company in Ohio?
A construction management degree is not necessary to start a business in construction, but it can help with working knowledge of the industry.
How should I structure my Ohio-based construction business?
Consult professionals when you’re structuring your Ohio-based construction business, as their advice can vary depending on company size and organizational needs.
How can I stay competitive in Ohio’s crowded construction industry?
Constantly training and updating employees, being observant to clients’ requirements and requests, and staying up-to-date on industry-related trends can enable Ohio-based construction companies to remain competitive.
How can I market my Ohio-based construction business to get more work?
Partnerships, online platforms, referral marketing, print/marketing ads and targeted social media advertising are some of the various offline and online marketing methods available for Ohio-based construction company owners.
What should I include in my Ohio-based construction business plan?
A construction company’s business plan should include an industry and competitor analysis, financial plan, short-term and long-term goals, and marketing strategies.
Can my Ohio-based construction company work with government projects?
Your Ohio-based construction company can work with government agencies only after intricate registration formalities and licenses have been documented. Bids for governmental building projects can be found at various websites such as Ohio Business Gateway auc-tions.ohio.gov.
Is it mandatory to have a workers’ compensation program for my Ohio-based construction company?
Yes, it is mandatory to maintain workers compensation in your Ohio-based construction business according to state and federal laws instead of opting out, except for sole proprietors of a commercial enterprise and with certain conditions for non-profit employers ever submitting a bid or executing contract agreements with government offices and agents that require it.
What licenses do I need to start a construction company in Ohio?
You will need a general contractor’s license and potentially specialized trade licenses such as plumbing or electrical.
How long does it take to get a general contractor’s license in Ohio?
The process can take up to six weeks depending on how quickly you complete the necessary paperwork and pass the exams.
Can I operate a construction company in Ohio without a general contractor’s license?
No, a license is required to operate as a general contractor in Ohio.
Is there a limit on the number of employees I can hire for my construction company in Ohio?
No, there are no specific limits on the number of employees a construction company can have in Ohio.
Do I need to register my construction company in Ohio?
Yes, you will need to register your business with the Ohio Secretary of State.
What are the tax requirements for starting a construction company in Ohio?
You will need to obtain necessary tax IDs and register with the Ohio Department of Taxation.
Are there any local tax requirements for starting a construction company in Ohio?
Yes, some local cities in Ohio require additional tax registration and fees.
What insurance do I need for my construction company in Ohio?
You will need general liability insurance and potentially workers’ compensation insurance.
Do I need to have a physical office location in Ohio for my construction company?
No, you do not need a physical office location in Ohio to operate a construction company.
Can I sue on behalf of a client as a construction company in Ohio?
No, construction companies are not authorized to file lawsuits on behalf of clients in Ohio.
What protections exist for subcontractors working with construction companies in Ohio?
The Ohio Prompt Pay law requires general contractors to provide payment to subcontractors within a certain time frame.
How are construction contracts handled in Ohio?
Construction contracts in Ohio must be in writing and follow specific state regulations.
What is the prevailing wage in Ohio for construction projects?
The prevailing wage in Ohio varies depending on the type of project and location.
Can I specialize in a specific area of construction in Ohio?
Yes, construction companies in Ohio can specialize in areas such as electrical, plumbing, or HVAC.
Is bonding required for Ohio construction projects?
Depending on the project scope, obtaining bonding may be required.
Can my construction company bid on state-funded projects in Ohio?
Yes, construction companies in Ohio can bid on state-funded projects.
What safety regulations must construction companies in Ohio follow?
Construction companies in Ohio must comply with state and federal safety regulations, such as OSHA standards.
Are permits required for construction projects in Ohio?
Yes, specific permits are required for certain types of construction projects in Ohio.
How do I find a good construction lawyer in Ohio to help with legal matters?
Referrals from other construction professionals and a search through the Ohio State Bar Association are good resources for finding a quality construction lawyer in Ohio.
What is the timeline for Ohio construction projects?
The timeline for Ohio construction projects varies by project scope, but most take anywhere from a few weeks to several months to complete.
How do I find clients for my construction company in Ohio?
Soliciting bids for state and local government projects and promoting services through marketing and networking can help you find clients for your construction company in Ohio.
How can I finance my construction company in Ohio?
Traditional options such as bank loans, private investors, or government grants are common ways to finance a construction company in Ohio.
Can I work as an independent contractor for my own construction company in Ohio?
Yes, as long as you have obtained necessary licenses and insurance, you can operate as an independent contractor for your construction company in Ohio.
Are there restrictions for using subcontractors for Ohio construction projects?
No, as long as subcontractors meet necessary state requirements, they can be used for Ohio construction projects.
What is the process for obtaining necessary permits for a construction project in Ohio?
The process for obtaining permits varies depending on the city or county of the project. Researching online or contacting local zoning offices can help you understand the process.
Can I challenge a state decision involving my construction company in Ohio?
Yes, you can challenge state licensing or construction decisions through the Ohio Board of Building Standards.
What are the penalties for not having necessary licenses for my construction company in Ohio?
Fines, suspension of licenses, and even criminal penalties may occur for construction companies who operate without required licenses in Ohio.

Also Read

Conclusion

Starting a construction company in Ohio can be challenging yet rewarding for those prepared to invest the time, effort, and resources necessary for success. By following the steps outlined in this article and dedicating yourself to providing exceptional service and quality work, you can create a thriving construction business that stands out in the competitive Ohio market.

Leave a Comment